2019-8-20 August 2019 Production - Correction

United States Department of State
Washington, D. C. 20520
August 20, 2019
Case No. F-2014-06088

Segment: IPS-0005
Mr. Jason I. Poblete

PobleteTamargo LLP
Courthouse Square
510 King Street, Suite 350
Alexandria, Virginia 22314
Dear Mr. Poblete:
I refer to our letter dated August 8, 2019, regarding the release of certain Department of State
records under the Freedom ofInformation Act ("FOIA"), 5 U.S.C. § 552. We are correcting the
documents included in that production because we inadvertently enclosed documents previously
provided to you in our July 2019 release. Since our July release, our processing yielded 14
additional responsive documents to your request. As previously noted, we determined that 2
documents may be released in full and 12 documents may be released in part.
An enclosure explains the FOIA exemptions and other grounds for withholding material. Where
we have made excisions, the applicable exemptions are marked on each document. All non-
exempt material that is reasonably segregable from the exempt material has been released, and is
enclosed.
The processing of documents is ongoing. We will keep you informed as your case progresses. If
you have any questions, your attorney may contact Jeremy S. Simon at (202) 252-2528 or
Jeremy.simon@usdoj.gov. Please refer to the case number, F-2014-06088, and the civil action
number, 18-cv-02335, in all correspondence regarding this case.
Sincerely,
~~~J
Deputy Director
Office of Information Programs and Services
Enclosures: As stated
The Freedom of Information Act (5 USC 552)
FOrA Exemptions
, ,
(b Xl) Information specifically authQrized by an executive order to be kept secret in the interest of
national defense or foreign policy. Executive Order 13526 includes the following
classification categories:
J A (a)
Military plans, systems, or operations
lA(b) Foreign government infomiation
1.4( c)
Intelligence activities, sources or methods, or cryptology
lA(d) Foreign relations or foreign activities of the US; including confidential sources
lACe) Scientific, technological, or economic matters relating to national security,
including defense against transnational terronsm
lA(t) U.S. Government programs for safeguarding nuclear materials or faCilities
l.4(g) Vulnerabilities or capabilipes of syStems; installations, infrastructures, projects,
plans, or protection services relating to US national security, including defense
against transnational terrorism
1.4(h) Weapons of mass destruction
'(b )(2) Related solely to the i~ternal pers~nnel rules and practices of an agency
(bX3) Specifically exempted from disclosure by statute (other than 5 usc 552), for example:
ARMSEXP Arms Export Control Act, 50a USC 241 I (c)

CIA PERS/ORG Central Intelligence Agency Act of 1949, SO USC 403(g)
EXPORT CONTROL Export Administration Act of 1979, 50 USC App. Sec. 241 1(c)
FSACT Foreign Service Act of 19&0, 22 USC 4004 '
lNA Immigration and Nationality Act, 8 USC 1202(£), Sec. 222(£)
IRAN Iran Claims Settlement Act, Public Law 99-99, Sec. 50S
,(bX4) Trade secrets and Confidential commercial or fina.n,cial information'
(bX5) Interagency or intra-agency communications forming part of the delibera.ti:ve process,

attomey-dientprivilege .•or attorney work product '
(b X 6) _ Personal privacy information
(bX7) Law enforcement information whose disclosure would:

(A) in~erfere with enforcement proceedings
(B) deprive a person of a' fair trial "
(C) con'stitUte an unwarranted invasion ofpers_onal privacy
(D) disclose confidential sources
(E) disclose investigation techniques
(F) endanger 'life or physical safety of an iitdividual
,
(b)(8) Prepared l:!y or for a government agency regulating or supetvisihg fmancial institutions
(bX9) Geological and geoph>,sical information and data, including maps, concerning well~
Other Grounds for Withholding

, _
NR Material not responsive to a FOIA request excised with the agreement of the requester
C 0 6 713 8 5 2 U.S. Department of State Case No. F-2014-06088 Doc No. C06713852 Date: 08/07/2019
[RELEASE IN PART BS]
From: Rettig, Max L <RettigML@state.gov>

Sent: Wednesday, January 7, 2015 9:49 AM
To: Egan, Brian J. (Brian J Egan@who.eop.gov); Fonzone, Christopher
(Christopher C Fonzone@who.eop.gov)
Cc: Highsmith, Newell L <HighsmithNL@state.gov>; Grosh, Lisa J <GroshLJ@state.gov>;
Simcock, Julian C <SimcockJC@state.gov>; Kovar, Jeffrey D <KovarJD@state.gov>;
Melamud, Anna <MelamudA@state.gov>; Malin, Mary Catherine
<MALINMC@state.gov>; Kimball, Emily J <KimballEJ@state.gov>; Huitema, David P
<HuitemaDP@state.gov>; Teel, Wynne M <TEELWM@state.gov>
Subject: State-L Paper Addressing Cuba Claims
Attach: Memo re Property and Te1rnrism-Related Claims Against Cuba (Final).docx; Tab 1 -
Te1rnrism-Related Damage Awards and A.mounts Recovered.docx
Brian and Chris,
With credit to a team of lawyers here, we've prepared the attached paper describing potential complications posed by
outstanding claims and judgments against Cuba. The a er also briefl addresses rior claims settlement a reements
~~t\,\/t?t?l1 !~t? ~11itt?~ ?t~tt?~ ~11~ !()rt?iflf1 il()\1~~11111t?l1t~: B5
85
We look forward to answering any questions you might have.
Best,
Max
Max Rettig
Special Assistant
Office of the Legal Adviser
U.S. Department of State
(202) 647-7970
SBU
This email is UNCLASSIFIED.
UNCLASSIFIED U.S. Department of State Case No. F-2014-06088 Doc No. C06713852 Date: 08/07/2019
From: Wyngowski, Seth A <WyngowskiSA@state.gov>

Sent: Thursday, October 8, 2015 12:19 PM
To: Kovar, Jeffrey D <KovarJD@state.gov>; Melamud, Anna <MelamudA@state.gov>;
Grosh, Lisa J <GroshLJ@state.gov>; Simcock, Julian C <SimcockJC@state.gov>;
Ban-on, Benjamin A <BatrnnBA@state.gov>
Cc: Murakami, Kevin T <MurakamiKT@state.gov>
Subject: Two pending claims-related OF AC cases
Attach: RE_ Refen-al to State_ Taconic Capital Advisors LP - CU-2015-321861-l.msg; RE_
RefetTal to State Fortress Group-CU-2015-321090-1.msg
Hi All,
I was wondering if we might be able to discuss the way forward on two additional claims-related OFAC referrals, Fortress
Group and Taconic Capital Advisors. I've attached the referral emails and documentation here (!just finished going
through each).
Recognizing that Anna and Ben are on travel, perhaps we can aim to discuss late next week? If you could let me know
whether Thursday (10/15) before 3pm or Friday (10/16) any time would work, that would be great.
B5
Best,
Seth
Seth A. Wyngowski
Foreign Affairs Officer
Office of the Coordinator for Cuban Affairs I WHA/CCA
2201 C Street NW I Room 3234 I Washington, DC 20520
(202) 647-7488 (o) I (202) 316-0485 (bb) I WyngowskiSA(illstate.gov
SBU
This email is UNCLASSIFIED.
From: Simcock, Julian C <SimcockJC@state.gov> [RELEASE IN FULL]

Sent: Friday, December 4, 2015 12:36 PM
To: WHA-CCA Economic Unit <WHA-CCAEconomicUnit@state.gov>; Kovar, Jeffrey D
<KovarJD@state.gov>; Melamud, Anna <MelamudA@state.gov>; Kimball, Emily J
<KimballEJ@state.gov>; Khawam, Joseph N <KhawamJN@state.gov>
Cc: Grosh, Lisa J <GroshLJ@state.gov>; Daley, John D <DaleyJD@state.gov>; Wells, Mark
A (Cuban Affairs) <WellsMA@stak.gov>; Perkins, Joan C <PerkinsJC@state.gov>;
Gill, Ruchi Gugliani <Gillrg@state.gov>
Subject: Urgent Clearance: TPs & Briefing Papers on Cuba Claims Dialogue
Attach: Mary McLeod Opening Remarks Cuba Claims Discussion (For Clearance).docx; FCSC
Claims - Background TPs and Briefing (For Clearance ).docx; FCSC Claims - Valuation
TPs and Briefing Paper (For Clearance ).docx; FSIA Claims - TPs and Briefing Paper
(For Clearance).docx; US Gov't Claims - TPs and Briefing Paper (For Clearance).docx
All,
Attached for your review are talking points and briefing papers for the first meeting of the bilateral dialogue with Cuba on
outstanding claims. There are five papers in total, including Mary's opening remarks.
With apologies for the short turnaround, we would be grateful for your review and clearances by 4:00 pm today. Because
the US. delegation leaves for Cuba on Sunday morning, this is a hard deadline.
Please don't hesitate to let me know if you have any questions.
Many thanks,
Julian
Julian Simcock
Attorney Adviser, Office of the Legal Adviser
Office: 202.776.8477
SimcockJC@state.gov
SENSITIVE BUT UNCLASSIFIED
Claims Certified by the Foreign Claims Settlement

Commission: Background & Process
[RELEASE IN PART BS)
Cuba Claims Presentation
December 8, 2015 at [TIME]
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Background
U.S. nationals hold a wide variety of claims against Cuba for property seized
during the nationalization of the Cuban economy between 1959 and the late 1960s.
The lion's share of the expropriated property was owned by corporations-
factories, mines, oil refineries, and other business interests. The Foreign Claims
Settlement Commission (FCSC) has completed two programs adjudicating claims
against Cuba, certifying 5,913 awards with a total principal value of $1. 91 billion
(not including interest). We expect discussion of these claims to comprise a
substantial portion of our presentation to the Cuban goven1ment. We intend to
address them in two briefings: the first, discussed here-in, describes the FCSC and
its methods; and the second, discussed in a separate briefing paper, describes the
scope and valuation of the claims.
F ollmving the overthrow of Fulgencio Batista's government in 1959, Fidel

Castro transformed Cuba into a one-party socialist state under communist rule. He
instituted widespread healthcare and education reforms, and began an incremental
process of nationalizing the economy. 1n the course of doing so, his regime
expropriated a significant amount of property owned by U.S. nationals.
The FCSC has completed two programs adjudicating claims by U.S.

nationals against the government of Cuba. The first program covered claims of
U.S. nationals arising between January 1, 1959, and October 16, 1964. Pursuant to
amendments to the International Claims Settlement Act of 1949, H.R. 12259,
codified at 22 U.S.C. § 1643 et seq., enacted on October 16, 1964, theFCSC was
authorized to determine the validity and amount of claims for: (1) losses resulting
from the nationalization, expropriation, intervention, or other takings of property

by Cuba; and (2) the disability or death of U.S. nationals from actions taken by the
Cuban government. Over the course of the first Cuba claims program, which
concluded on July 6, 1972, the FCSC adjudicated a total of 8,816 claims, and
rendered 5,911 certified awards with a total principal value of $1.85 billion.
The second Cuban claims program covered claims of U.S. nationals for
takings of property by the Cuban goven1ment after May 1, 1967, and that were not
adjudicated in the first program. Then-Secretary of State Rice referred these
claims to the FCSC for adjudication on July 15, 2005, pursuant to existing
authority under the Inten1ational Claims Settlement Act. Over the course of the
second program, which concluded on August 11, 2006, the FCSC adjudicated five
additional claims. Only two claims resulted in certified awards, with a principal
value of $51 million. The larger of the two claims was held by a corporation,
Starwood Hotels & Resorts Worldwide, and the other was held by an individual.
In total, the 5,913 certified claims held a principal value of approximately

$1.91 billion at the time of certification. If interest is included at a rate of 6% per
annum from the date ofloss to the date of settlement, the estimated value of the
claims today may exceed $8 billion. Congress did not appropriate funds for
payment of the awards certified by the FCSC, and the claimants have not
recovered any compensation to date - from blocked Cuban assets or otherwise.
Although the proceedings before the FCSC were non-adversarial (Cuba did
not appear as a party), the Commission's adjudicatory methodologies were
objective and rigorous. The first Cuban claims program, during which the vast
majority of the property claims were adjudicated, took almost seven years to
complete, beginning on November 1, 1965 and finishing on July 6, 1972. For
purposes of the upcoming claims dialogue with Cuba, several particular aspects of
the FCSC's methods are relevant.
First, the FCSC's adjudications were based on evidence gathered in the

years immediately after the Castro regime nationalized the Cuban economy.
Indeed, in signing H.R. 12259 into law, President Jolmson made clear: "I have
signed it because of the importance of making such a permanent record while
evidence and witnesses are still available." By statute, the Connnission was
authorized to order depositions and to subpoena the testimony of witnesses and the
production of all necessary books, papers, documents, records, correspondence.
As a result, the Commission's findings are based on the type of contemporaneous
evidence and testimony that would be difficult to obtain if a separate tribunal, or

other adjudicatory body, were to revisit these claims today.
Second, guided in part by relevant legislative history, the Commission

imposed strict limitations on the types of claims that were eligible for certification.
A large number of claims were rejected outright, including claims for certain losses
incurred via indirect stock ownership, claims for expenses incurred in moving
personnel and records from Cuba after an enterprise had been nationalized, and
claims supported by insufficient evidence or documentation. In fact, of the 8,821
claims adjudicated by the Commission, it certified only 5,913 that is, it denied
approximately one-third of the claims it considered.
Third, among those claimants whose awards were certified, many received
far less than the full amount of compensation requested. The FCSC used well-
established principles of valuation, including, but not limited to, "fair market value,
book value, going concern value, or cost of replacement." Further, personal
property was generally "depreciated to arrive at the[] values on the dates of loss,"
and the Commission offset claimants' requests for damages by the amount of any
outstanding debts owed to the Cuban government. Indeed, some scholars have
questioned whether the FCSC's methods led to valuations that were too
conservative, "particularly when valuing business property and evidencing a
reluctance to adopt going concern value approaches which would give higher final
valuations than the Commission's more traditional utilization of book value
methods."
Although property claimants with FCSC awards cannot seek to satisfy their
claims by attaching Cuban goven1ment blocked assets, claimants and members of
Congress continue to pressure the Administration to address these claims. Indeed,
of all the outstanding categories of claims against Cuba, the certified claims have
received the most significant media attention following the President's December
17 announcement that the United States would seek to normalize relations with
Cuba. In addition, certain media outlets have in the past quoted U.S. officials as
saying that before the United States lifts the trade embargo against Cuba, Cuba
must address the expropriation ofU.S.-0\vned property.
In addition to confiscating the assets of U.S. nationals, Cuba expropriated

property owned by the nationals of a variety of U.S. allies. A number of these
nations - including France, Switzerland, the United Kingdom, Canada and Spain -
have since settled their claims with Cuba through bilateral agreements. Several
themes characterize these settlements. First, the nations that negotiated on behalf
of the claimants often appear to have settled for a small portion of the claims'
estimated value. Second, settlement payments by Cuba were typically made in the
form of installments over a number of years. Third, in some circumstances,
subsequent to the agreement, trade between Cuba and the goven1ment representing
the claimants increased substantially. Finally, past negotiations typically involved
the Cuban government and the govenm1ent representing the claimants; not the
claimants themselves.
Approved: L - Mary E. McLeod, Principal Deputy Legal Adviser ()
Drafted: Julian Simeoek (L/CID), Ext. 6-8477
Cleared: WHA/CCA: MWells ()

WHA/CCA: RFigueroa ()
L/CID: LGrosh ()
LIEB: JKhawam ()
L/WHA: JKovar/AMelamud ()
L/DL: EKimball ()

[RELEASE IN PART BS[
Commission: Scope and Valuation

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Background
The FCSC has completed two programs adjudicating claims against the
government of Cuba. The first program covered claims of U.S. nationals arising
between January 1, 1959, and October 16, 1964. The second Cuban claims
program covered claims of U.S. nationals for takings of property by the Cuban
government after May 1, 1967, and that were not adjudicated in the first program.
Over the course of the second program, only two claims resulted in certified
awards, \Nith a principal value of $51 million (the larger of the two claims was held
by a corporation, Starwood Hotels & Resorts Worldwide, and the other was held
by an individual). In total, the Commission certified 5,913 claims, with a principal
value of approximately $1.91 billion at the time of certification. If interest is

6
included at a rate of 6% per annum from the date of loss to the date of settlement,
the estimated value of the claims today may exceed $8 billion.
Congress did not appropriate funds for payment of the awards certified by
the FCSC, and the claimants have not recovered any compensation to date - from
blocked Cuban assets or otherwise. An interagency study conducted prior to the
claims programs concluded that "Cuban Government assets in the United States
were not of sufficient magnitude to warrant [the liquidation of frozen assets]."
Instead, as the FCSC observed, the claims program "may be classified as a
presettlement adjudication of claims to determine the extent of American losses
and provide a tool for our Government in dealing with the Government of Cuba in
the future on this important intenwtional issue."
Pursuant to their terms, several of Cuba's expropriation laws provided for

compensation. Under the Agrarian Reform Law of 1959, for example, the
government promised compensation "in the form of twenty year government bonds
with four and one-half percent interest." Similarly, Law No. 851 provided for
payment by "30 years bonds with two percent interest, to be paid from a dollar
surplus fund accumulated by profits from sales in excess of three million tons of
sugar purchased annually by the United States, at not less than 5.75 cents per
pound." This latter commitment was an empty promise even at the time it was
made. The United States sugar quota had been nearly eliminated for the balance of
the year in 1960. As far as the Department is aware, no compensation was ever
paid under either the Agrarian Reform Law of 1959 or Law No. 851. That the
Cuban government made such assurances at the time of the takings, however,
indicates that they perceived some form of compensation was necessary.
Further, Article 3 of Cuban Law 80 of 1996 provides: "The claims for

compensation for the expropriation of U.S. properties in Cuba nationalized through
that legitimate process, validated by Cuban law and inten1ational law referred to in
the preceeding article, may be part of a negotiation process between the
Government of the United States and the Government of the Republic of Cuba, on
the basis of equality and mutual respect." The law goes on, however, to condition
any payment of these claims on an examination of the U.S. embargo: "The
indemnification claims due to the nationalization of said properties shall be
examined together with the indemnification to which the Cuban state and the
Cuban people are entitled as a result of the damages caused by the economic
blockade and the acts of aggression of all nature which are the responsibility of the
Government of the United States of America."

7
The Castro regime's expropriations affected a wide variety of individuals

and entities, the diversity of which is reflected in the awards certified by the FCSC.
While a handful of these claims concern personal injury losses, the vast majority
involve basic allegations ofloss for expropriated personal property. Claim No.
3820, described above, is a typical example. Ms. Alvarez brought a claim for
personal items located at her home, which were taken by the Cuban government
pursuant to Law No. 989. Cuban Law No. 989 authorized the expropriation of
abandoned property. Pursuant to Resolution 454 of the Ministry of Interior, dated
September 29, 1961, Cubans leaving the country for the United States had twenty-
nine days to return to Cuba. Failure to do so constituted a permanent departure
from the country, and subjected an individual's property to confiscation. The
FCSC held that "all properties, goods, chattels, and bank accounts of persons who
had left Cuba were taken by virtue of Cuban Law 989."

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Drafted: Julian Simcock (L/CID), Ext. 6-8477

WIWCCA: RFigueroa ()
L/CID: LGrosh ()
LIEB: JKhawam ()
L/DL: EKimball ()
Claims Held by U.S. Nationals under the

"Terrorism Exception" to the FSIA
Cuba Claims Presentation [RELEASE IN PART BS[

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Background
Aside from the FCSC claims, the next largest group of claims against Cuba
belongs to plaintiffs with outstanding judgments entered by U.S. courts under the
"terrorism exception" to the Foreign Sovereign Immunities Act (FSIA). Since
Congress enacted legislation in 1996 permitting terrorism suits against designated
state sponsors of terrorism, plaintiffs have obtained default judgments for
compensatory damages valued at $2.22 billion against Cuba, the majority of which
remain unsatisfied. If punitive damages are included, valued at approximately
$1.99 billion, the terrorism-related judgments against Cuba total approximately
$4.21 billion, not including statutory interest. As the State Department has
consistently advised Congress, however, the award of punitive damages against a
sovereign-while permitted by the Foreign Sovereign Immunities Act, 28 U.S.C. §
l 605A-is inconsistent with international legal nom1s, and such damages are
rarely included in claims settlement agreements. We estimate that of the total
amount of damages awarded, plaintiffs have recovered less than $183 million.
In 1996, Congress amended the FSIA to create an exception to sovereign

immunity that allowed suits to be brought by U.S. nationals against foreign states
for acts of terrorism that occurred while the state was designated as a sponsor of
terrorism (SST) or if the country was "so designated as a result of such acts." In
2002, Congress enacted the Terrorism Risk Insurance Act (TRIA), which gave
victims of terrorism the ability to satisfy their judgments through attachment of the
"blocked assets" of a "terrorist party." Cuba was designated as a state sponsor of
terrorism (SST) in 1982, and remained so designated until May 29, 2015.
Pursuant to the FSIA, following the date of Cuba's de-designation, eligible
claimants had six months to file claims under the "terrorism exception" provision.
That window expired on November 29, 2015. Accordingly, at the time of the
delegation's trip to Havana to discuss claims, Cuba will no longer be exposed to
liability via this exception to the FSIA.
To date, U.S. courts have entered at least 13 terrorism-related default

judgments against Cuba under the FSIA. Nearly $1.8 billion of these damages
were awarded in a single case, and some of the judgments are likely based on
flawed applications of the statutory regime.
Cuba has not appeared in any of the underlying cases brought under the
terrorism-exception to the FSIA, but it has hired counsel, including on behalf of
certain of its agencies and instrumentalities, to defend against certain attachment
efforts. In only seven of thirteen of the underlying cases have plaintiffs been able
to recover any compensation, and, in most, portions of the judgments remain
unsatisfied. In only one case have plaintiffs been able to recover full
compensatory damages.
These outstanding terrorism-related judgments against Cuba have had-and

continue to have-significant implications for U.S. policies regarding Cuba. For
example, the prospect of litigation to attach telecommunications revenues has the
potential to deter telecommunications firms from entering into contracts to expand
communications between the United States and Cuba, and such litigation could
impede the President's efforts to increase the flow of information to the Cuban
people. As the breadth of commercial activity with the Goven1ment of Cuba and
its agencies and instrumentalities expands as a result of the changes armounced by
the President, we can expect attachment efforts by plaintiffs to expand to try to
capture payments made in connection with this activity.
The Cuban Government considers the U.S. court judgments against it to be

inconsistent with international law. As set forth in a diplomatic note sent from
Cuba to the United States concerning certain attachment proceedings in Hausler v.
Republic of Cuba, Cuba's Ministry for Foreign Affairs contends that "in
conformity with international law, the Republic of Cuba enjoys immunity from
trials before any U.S. State or Federal Court." To that end, the Ministry of Foreign
Affairs noted that it "considers the [Hausler] judgment ... and, consequently, any
further action that may derive from it ... a violation of the international
obligations of the United States."
L is exploring an opportunity by which to address the outstanding judgments

against Cuba using forfeited funds. On May 1, a U.S. District Court in New York
sentenced BNP Paribas ("BNPP") for facilitating transactions in violation of
sanctions against Iran, Cuba, and Sudan. BNPP forfeited more than $8.8 billion,
some $3.8 billion of which is going to the U.S. government, with the rest going to
New York state entities. DOJ announced it would explore ways to use the funds to
compensate individuals who were "hanned by" the regimes of Iran, Cuba, and
Sudan, and established a website to collect information on the scope of potential
victims and claims.
Irr late July 2015, the State Department provided DOJ with a proposal for
use of the funds forfeited by BNPP that would provide meaningful compensation
to a range of victims. The proposal urges DOJ to prioritize payments for Cuba-
related judgment holders and to allocate a portion of funds to be used solely for
such purposes. As a condition to receiving compensation, these judgment holders
would be required to assign all rights in their claims to the United States and to
terminate any litigation and vacate judgments related to the victim's harms -
including attachment-related litigation. The United States would then be free to
raise these claims, as appropriate, in negotiations with Cuba. Further, payments to
eligible victims would be offset by amounts previously received by the victim as
compensation for the same harms whether through enforcing a prior court
judgment or a statutory payment of a portion of the judgment. Some of these
judgment holders, however -Alejandre, iVJcCarthy, and Weininger - have already
received compensation in excess of the thresholds set forth in the BNPP proposal
and therefore would not be eligible for payments from the BNPP funds even under
our proposal.
Cleared: WIWCCA: MWells ()

L/CID: LGrosh ()
LIEB: JKhawam ()
L/DL: EKimball ()
U.S. Government Claims

Against Cuba
[RELEASE IN PART B5]

BS
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Background
In the first Cuba claims program, the Foreign Claims Settlement

Commission (FCSC) determined that claims by the U.S. Government fell beyond
the scope of its mandate under Title V of the International Claims Settlement Act.
As a result, the Commission declined to certify any claims for harm incurred by the
United States. Notwithstanding this outcome, the United States may bring claims
against Cuba for losses related to U.S. Government property. As set forth in its
unsuccessful submissions to the FCSC during the first Cuba Claims Program, the
United States holds several claims against Cuba for confiscated mining interests.
The first of these claims concerns stock losses incurred via the nationalization of
the Cuban Nickel Company. The second concerns the confiscation of

approximately 300 tons of nickel ore. Between the two, the United States
sustained losses of approximately $13 2 million, not including interest.
At the time that the Castro regime nationalized the Cuban economy, the
United States owned all of the issued and outstanding stock of Cuban Nickel
Company. The Company, which was organized as a corporation under the laws of
Cuba, held interests in a wide variety of land, property, mining equipment, and ore
deposits in Cuba. The largest of these interests was a metallurgical plant
constructed in Oriente Province. The facility was built by the United States in
1942 to produce materials for use in war-related industries. According to the
Statement of Claim submitted by the United States to the FCSC, the plant was
supported by a substantial network of infrastructure. These additional facilities -
referred to in the Statement of Claim as a "Townsite" - comprised a "completely
equipped town."
On October 24, 1960, "the President of the Republic of Cuba and First
Minster of the Revolutionary Government of Cuba, pursuant to the provisions of
Law No. 851 of 1960 ... promulgated Resolution No. 3 thereto ... which had the
effect of nationalizing and expropriating all of the assets of Cuban Nickel
Company and Nickel Processing Corporation and prevent[ing] their withdrawal."
Law No. 851 authorized the nationalization of all properties owned by U.S.
nationals.
As a result of these actions, the United States submitted a claim for itemized
losses, totaling $132,176,907.69. The claim was rejected in 1967 for the reasons
set forth above. Applying simple interest at a rate of 6% per arnmm, the claim
would be worth approximately $560 million today.
In addition to the claim for losses related to the Cuban Nickel Company, the
United States also submitted a claim for confiscated iron ore deposits located at
Moa Bay, Cuba. According to materials submitted in support of this claim, "on
June 30, 1960 the property ofMoa Bay Mining Company were nationalized by
means of forced expropriation pursuantto Law No. 890 of October 13, 1960." In
the course of the expropriation, the Cuban Goven1ment confiscated "300 long tons
of nickel ore located at Moa Bay, Cuba," title to which was "acquired by the
United States of America under Contract DEMP-105 with the Freeport Sulphur
Company." The United States submitted a claim to the FCSC for the $2,473 .19,
which was subsequently rejected in 1967.
Cleared: WIWCCA: MWells ()

L/CID: LGrosh ()
LIEB: JKhawam ()
L/DL: EKimball ()
CO 6 71410 7 U.S. Department of State Case No. F-2014-06088 Doc No. C06714107 Date: 08/07/2019
[RELEASE IN PART B5j


Commission: Background & Process

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Background
U.S. nationals hold a wide variety of claims against Cuba for property seized
during the nationalization of the Cuban economy between 1959 and the late 1960s.
The lion's share of the expropriated property was owned by corporations-
factories, mines, oil refineries, and other business interests. The Foreign Claims
Settlement Commission (FCSC) has completed two programs adjudicating claims
against Cuba, certifying 5,913 awards with a total principal value of $1. 91 billion
(not including interest). We expect discussion of these claims to comprise a
substantial portion of our presentation to the Cuban goven1ment. We intend to
address them in two briefings: the first, discussed here-in, describes the FCSC and
its methods; and the second, discussed in a separate briefing paper, describes the
scope and valuation of the claims.
F ollmving the overthrow of Fulgencio Batista's government in 1959, Fidel

Castro transformed Cuba into a one-party socialist state under communist rule. He
instituted widespread healthcare and education reforms, and began an incremental
process of nationalizing the economy. 1n the course of doing so, his regime
expropriated a significant amount of property owned by U.S. nationals.
The FCSC has completed two programs adjudicating claims by U.S.

nationals against the government of Cuba. The first program covered claims of
U.S. nationals arising between January 1, 1959, and October 16, 1964. Pursuant to
amendments to the International Claims Settlement Act of 1949, H.R. 12259,
codified at 22 U.S.C. § 1643 et seq., enacted on October 16, 1964, theFCSC was
authorized to determine the validity and amount of claims for: (1) losses resulting
from the nationalization, expropriation, intervention, or other takings of property

by Cuba; and (2) the disability or death of U.S. nationals from actions taken by the
Cuban government. Over the course of the first Cuba claims program, which
concluded on July 6, 1972, the FCSC adjudicated a total of 8,816 claims, and
rendered 5,911 certified awards with a total principal value of $1.85 billion.
The second Cuban claims program covered claims of U.S. nationals for
takings of property by the Cuban goven1ment after May 1, 1967, and that were not
adjudicated in the first program. Then-Secretary of State Rice referred these
claims to the FCSC for adjudication on July 15, 2005, pursuant to existing
authority under the Inten1ational Claims Settlement Act. Over the course of the
second program, which concluded on August 11, 2006, the FCSC adjudicated five
additional claims. Only two claims resulted in certified awards, with a principal
value of $51 million. The larger of the two claims was held by a corporation,
Starwood Hotels & Resorts Worldwide, and the other was held by an individual.
In total, the 5,913 certified claims held a principal value of approximately

$1.91 billion at the time of certification. If interest is included at a rate of 6% per
annum from the date ofloss to the date of settlement, the estimated value of the
claims today may exceed $8 billion. Congress did not appropriate funds for
payment of the awards certified by the FCSC, and the claimants have not
recovered any compensation to date - from blocked Cuban assets or otherwise.
Although the proceedings before the FCSC were non-adversarial (Cuba did
not appear as a party), the Commission's adjudicatory methodologies were
objective and rigorous. The first Cuban claims program, during which the vast
majority of the property claims were adjudicated, took almost seven years to
complete, beginning on November 1, 1965 and finishing on July 6, 1972. For
purposes of the upcoming claims dialogue with Cuba, several particular aspects of
the FCSC's methods are relevant.
First, the FCSC's adjudications were based on evidence gathered in the

years immediately after the Castro regime nationalized the Cuban economy.
Indeed, in signing H.R. 12259 into law, President Jolmson made clear: "I have
signed it because of the importance of making such a permanent record while
evidence and witnesses are still available." By statute, the Connnission was
authorized to order depositions and to subpoena the testimony of witnesses and the
production of all necessary books, papers, documents, records, correspondence.
As a result, the Commission's findings are based on the type of contemporaneous
evidence and testimony that would be difficult to obtain if a separate tribunal, or

other adjudicatory body, were to revisit these claims today.
Second, guided in part by relevant legislative history, the Commission

imposed strict limitations on the types of claims that were eligible for certification.
A large number of claims were rejected outright, including claims for certain losses
incurred via indirect stock ownership, claims for expenses incurred in moving
personnel and records from Cuba after an enterprise had been nationalized, and
claims supported by insufficient evidence or documentation. In fact, of the 8,821
claims adjudicated by the Commission, it certified only 5,913 that is, it denied
approximately one-third of the claims it considered.
Third, among those claimants whose awards were certified, many received
far less than the full amount of compensation requested. The FCSC used well-
established principles of valuation, including, but not limited to, "fair market value,
book value, going concern value, or cost of replacement." Further, personal
property was generally "depreciated to arrive at the[] values on the dates of loss,"
and the Commission offset claimants' requests for damages by the amount of any
outstanding debts owed to the Cuban government. Indeed, some scholars have
questioned whether the FCSC's methods led to valuations that were too
conservative, "particularly when valuing business property and evidencing a
reluctance to adopt going concern value approaches which would give higher final
valuations than the Commission's more traditional utilization of book value
methods."
Although property claimants with FCSC awards cannot seek to satisfy their
claims by attaching Cuban goven1ment blocked assets, claimants and members of
Congress continue to pressure the Administration to address these claims. Indeed,
of all the outstanding categories of claims against Cuba, the certified claims have
received the most significant media attention following the President's December
17 announcement that the United States would seek to normalize relations with
Cuba. In addition, certain media outlets have in the past quoted U.S. officials as
saying that before the United States lifts the trade embargo against Cuba, Cuba
must address the expropriation ofU.S.-0\vned property.
In addition to confiscating the assets of U.S. nationals, Cuba expropriated

property owned by the nationals of a variety of U.S. allies. A number of these
nations - including France, Switzerland, the United Kingdom, Canada and Spain -
have since settled their claims with Cuba through bilateral agreements. Several
themes characterize these settlements. First, the nations that negotiated on behalf
of the claimants often appear to have settled for a small portion of the claims'
estimated value. Second, settlement payments by Cuba were typically made in the
form of installments over a number of years. Third, in some circumstances,
subsequent to the agreement, trade between Cuba and the goven1ment representing
the claimants increased substantially. Finally, past negotiations typically involved
the Cuban government and the govenm1ent representing the claimants; not the
claimants themselves.
Drafted: Julian Simeoek (L/CID), Ext. 6-8477

L/CID: LGrosh ()
LIEB: JKhawam ()
L/DL: EKimball ()
C 0 6 714111 U.S. Department of State Case No. F-2014-06088 Doc No. C06714111 Date: 08/07/2019

RELEASE IN PART
Commission: Scope and Valuation B5,B6

B5

85
86
D
86
86

3
BS

4
85

5
85
Background
The FCSC has completed two programs adjudicating claims against the
government of Cuba. The first program covered claims of U.S. nationals arising
between January 1, 1959, and October 16, 1964. The second Cuban claims
program covered claims of U.S. nationals for takings of property by the Cuban
government after May 1, 1967, and that were not adjudicated in the first program.
Over the course of the second program, only two claims resulted in certified
awards, \Nith a principal value of $51 million (the larger of the two claims was held
by a corporation, Starwood Hotels & Resorts Worldwide, and the other was held
by an individual). In total, the Commission certified 5,913 claims, with a principal
value of approximately $1.91 billion at the time of certification. If interest is

6
included at a rate of 6% per annum from the date of loss to the date of settlement,
the estimated value of the claims today may exceed $8 billion.
Congress did not appropriate funds for payment of the awards certified by
the FCSC, and the claimants have not recovered any compensation to date - from
blocked Cuban assets or otherwise. An interagency study conducted prior to the
claims programs concluded that "Cuban Government assets in the United States
were not of sufficient magnitude to warrant [the liquidation of frozen assets]."
Instead, as the FCSC observed, the claims program "may be classified as a
presettlement adjudication of claims to determine the extent of American losses
and provide a tool for our Government in dealing with the Government of Cuba in
the future on this important intenwtional issue."
Pursuant to their terms, several of Cuba's expropriation laws provided for

compensation. Under the Agrarian Reform Law of 1959, for example, the
government promised compensation "in the form of twenty year government bonds
with four and one-half percent interest." Similarly, Law No. 851 provided for
payment by "30 years bonds with two percent interest, to be paid from a dollar
surplus fund accumulated by profits from sales in excess of three million tons of
sugar purchased annually by the United States, at not less than 5.75 cents per
pound." This latter commitment was an empty promise even at the time it was
made. The United States sugar quota had been nearly eliminated for the balance of
the year in 1960. As far as the Department is aware, no compensation was ever
paid under either the Agrarian Reform Law of 1959 or Law No. 851. That the
Cuban government made such assurances at the time of the takings, however,
indicates that they perceived some form of compensation was necessary.
Further, Article 3 of Cuban Law 80 of 1996 provides: "The claims for

compensation for the expropriation of U.S. properties in Cuba nationalized through
that legitimate process, validated by Cuban law and inten1ational law referred to in
the preceeding article, may be part of a negotiation process between the
Government of the United States and the Government of the Republic of Cuba, on
the basis of equality and mutual respect." The law goes on, however, to condition
any payment of these claims on an examination of the U.S. embargo: "The
indemnification claims due to the nationalization of said properties shall be
examined together with the indemnification to which the Cuban state and the
Cuban people are entitled as a result of the damages caused by the economic
blockade and the acts of aggression of all nature which are the responsibility of the
Government of the United States of America."

7
The Castro regime's expropriations affected a wide variety of individuals

and entities, the diversity of which is reflected in the awards certified by the FCSC.
While a handful of these claims concern personal injury losses, the vast majority
involve basic allegations ofloss for expropriated personal property. Claim No.
3820, described above, is a typical example. brought a claim for 86
personal items located at her home, which were taken by the Cuban government
pursuant to Law No. 989. Cuban Law No. 989 authorized the expropriation of
abandoned property. Pursuant to Resolution 454 of the Ministry of Interior, dated
September 29, 1961, Cubans leaving the country for the United States had twenty-
nine days to return to Cuba. Failure to do so constituted a permanent departure
from the country, and subjected an individual's property to confiscation. The
FCSC held that "all properties, goods, chattels, and bank accounts of persons who
had left Cuba were taken by virtue of Cuban Law 989."

8

WIWCCA: RFigueroa ()
L/CID: LGrosh ()
LIEB: JKhawam ()
L/DL: EKimball ()
CO 6 714115 U.S. Department of State Case No. F-2014-06088 Doc No. C06714115 Date: 08/07/2019
From: Grosh, Lisa J <GroshLJ@state.gov>

Sent: Tuesday, December l, 2015 1:35 PM
To: McLeod, Mary <McleodM@state.gov>
Cc: Simcock, Julian C <SimcockJC@state.gov>; Daley, John D <DaleyJD(gJstate.gov>;
Melamud, Anna <MelamudA@state.gov>; Kovar, Jeffrey D <KovarJD@state.gov>
Subject: US Gov't Claims Paper (Revised).docx
Attach: US Gov't Claims Paper (Revised).docx
Mary,
I had asked Julian to draft a paper related to USG claims that are discussed in the FSCS report on the Cuban claims
program, but were ultimately rejected by the FCSC, because they did not meet the criteria of the statutory referral. This
paper addresses the two claims.I 85
85
Lisa
U.S. Government Claims

Against Cuba
B5
B5
85
85
85
24
See Exhibit A, C.
25
See Exhibit C. Para. 18.
From: Fogarty, Caitlin F <FogaityCF@state.gov>

[RELEASE IN PART 85]
Sent: Thursday, January 12, 2017 5:35 PM
To:
Subject: WHA Final Guidance for January 12, 2017
Attach: 12_January_2017.docx
Colleagues,
Please find final WHA guidance below. The full guidance package is attached.
Best,
Ca it
FINAL THURSDAY, JANUARY 12, 2017

GUIDANCES
POSTED Media Note -- United States and Cuba to Hold Claims Discussion
POSTED Media Note -- United States and Cuba to Hold Meeting to Fight Trafficking in
Persons
WHA Cuba -- United States and Cuba Meeting on Trafficking in Persons
WHA Cuba United States-Cuba Claims Discussion
THERE WAS A DAILY PRESS BRIEFING TODAY.
U.S. DEPARTMENT OF STATE

Office of the Spokesperson
For Immediate Release January 12, 2017
MEDIA NOTE
United States and Cuba to Hold Claims Discussion
The United States and Cuba will hold the third government-to-government meeting on claims in Havana, Cuba,
on January 12, 2017. T11e U.S. delegation will be led by Brian Egan, the Legal Adviser for the U.S. Department
of State. The meeting will allow the delegations to build upon previous discussions in Havana and Washington,
DC, and to exchange views on technical details and methodologies regarding outstanding claims.
Outstanding U.S. claims include claims of U.S. nationals that were certified by the Foreign Claims Settlement
Commission, claims related to unsatisfied U.S. court judgments against Cuba, and claims held by the United
States Government. The United States continues to view the resolution of these claims as a top priority.
For further infonnation, please contact WHA Press at WHAPress(lliState.Gov.
###

MEDIA NOTE
United States and Cuba to Hold Meeting to Fight Trafficking in Persons
The United States and Cuba will hold a meeting to coordinate their efforts to fight trafficking in persons in
Washington, D.C., January 12 and 13. The U.S. delegation will be led by Ambassador-at-Large Susan
Coppedge of the Office to Monitor and Combat Trafficking in Persons and Deputy Assistant Secretary John
Creamer of the Bureau of Western Hemisphere Affairs.
Working-level representatives from the Department of Justice, the Federal Bureau of Investigation, the
Depat1ment of Homeland Security, and the Depat1ment of Health and Human Services will also pat1icipate.
The Cuban delegation will be led by Director of Bilateral Issues Yuri Ariel Gala Lopez of the Ministry of
Foreign Affairs' Directorate General for the United States and will include officials from various Cuban
agencies.
This is the fourth consecutive exchange between the United States and Cuba on efforts to prevent and prosecute
trafficking in persons and protect trafficking victims. In addition to sharing information about best practices,
both sides will seek to identify areas of possible future cooperation.
For further information, please contact WHA Press at WHAPressriVState.Gov.
###
WHA Press Guidance

January 12, 2017
United States and Cuba Meeting on Trafficking in Persons
• Tiie United States and Cuba will hold a meeting to coordinate their eff01ts to fight trafficking in persons in
Washington, DC, January 12 and 13.
• The U.S. delegation will be led by Ambassador-at-Large Susan Coppedge of the Office to Monitor and
Combat Trafficking in Persons and Deputy Assistant Secretary John Creamer of the Bureau of Western
Hemisphere Affairs.
• l11e Cuban delegation will be led by Director of Bilateral Issues Yuri Ariel Gala Lopez of the Ministry of
Foreign Affairs' Directorate General for the United States and include officials from various Cuban
agencies.
85
85
Official
UNCLASSIFIED

MEDIA NOTE
United States and Cuba to Hold Claims Discussion
The United States and Cuba will hold the third government-to-government meeting on claims in
Havana, Cuba, on January 12, 2017. The U.S. delegation will be led by Brian Egan, the Legal
Adviser for the U.S. Department of State. The meeting will allow the delegations to build upon
previous discussions in Havana and Washington, DC, and to exchange views on technical details
and methodologies regarding outstanding claims.
Outstanding U.S. claims include claims of U.S. nationals that were certified by the Foreign
Claims Settlement Commission, claims related to unsatisfied U.S. court judgments against Cuba,
and claims held by the United States Government. The United States continues to view the
resolution of these claims as a top priority.
For further information, please contact WHA Press at WHAPressraState.Gov.
###
Approved: WHA/FO FPalmieri (ok)
Drafted: WlWCCA: Melissa Quartell, x7-7 488
Cleared: WHA/FO: JCreamer (ok)

WHAIFO: MTekach (ok)
WlWCCA: JP erkins (ok)
WHNCCA: K.Murakami (ok)
Embassy: DBro"'11 (ok)
D: CSpradlcy (ok)
D-MR: JPi erre-Louis (ok)
SIP: MCamillcri (ok)
P: JJeffreys (ok)
R: OBashbush (ok)
L/CID: JSimcock (ok)
L/CID: LGrosh (ok)
L/WHA: AMclamud (ok)
EB/EPPD: EFox (ok)
EB/TFS/ SPI: BBarron (ok)
EB/OIA: KVcras (ok)
WHNPress: JCrook (ok)
PA: NThompson (ok)
NSC/Prcss: EHome (ok)
WHA Press Guidance

January 12, 2017
United States-Cuba Claims Discussion
B5
BS
Approved: WHA/FO: FPalmieri (ok)
Drafted: WHA/CCA: Melissa Quartell, x7-7488
Cleared: WHA/FO: JCreamer (ok)

WHA/FO: MTekach (ok)
WHA/CCA: JPerkins (ok)
WHA/CCA: KMurakami (ok)
Embassy: DBrown (ok)
D: CSpradley (ok)
D-MR: JPierre-Louis (ok)
S/P: MCamilleri (ok)
P: JJeffreys (ok)
R: OBashbush (ok)
L/CID: JSimcock (ok)
L/CID: LGrosh (ok)
L/WHA: AMelamud (ok)
EB/EPPD: EFox (ok)
EB/TFS/ SPI: BBarron (ok)
EB/OIA: KVeras (ok)
WHA/Press: JCrook (ok)
PA: ETrudeau (ok)

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United States Department of State

August 20, 2019

Case No. F-2014-06088

Mr. Jason I. Poblete

Dear Mr. Poblete:

ARMSEXP Arms Export Control Act, 50a USC 241 I (c)

,(bX4) Trade secrets and Confidential commercial or fina.n,cial information'

(bX5) Interagency or intra-agency communications forming part of the delibera.ti:ve process,

(b X 6) _ Personal privacy information

(bX7) Law enforcement information whose disclosure would:

Other Grounds for Withholding

From: Rettig, Max L <RettigML@state.gov>

Brian and Chris,

From: Wyngowski, Seth A <WyngowskiSA@state.gov>

From: Simcock, Julian C <SimcockJC@state.gov> [RELEASE IN FULL]

Please don't hesitate to let me know if you have any questions.

SENSITIVE BUT UNCLASSIFIED

Claims Certified by the Foreign Claims Settlement

F ollmving the overthrow of Fulgencio Batista's government in 1959, Fidel

The FCSC has completed two programs adjudicating claims by U.S.

from the nationalization, expropriation, intervention, or other takings of property

In total, the 5,913 certified claims held a principal value of approximately

First, the FCSC's adjudications were based on evidence gathered in the

evidence and testimony that would be difficult to obtain if a separate tribunal, or

Second, guided in part by relevant legislative history, the Commission

In addition to confiscating the assets of U.S. nationals, Cuba expropriated

Approved: L - Mary E. McLeod, Principal Deputy Legal Adviser ()

Drafted: Julian Simeoek (L/CID), Ext. 6-8477

Cleared: WHA/CCA: MWells ()

SENSITIVE BUT UNCLASSIFIED

Cuba Claims Presentation

SENSITIVE BUT UNCLASSIFIED

SENSITIVE BUT UNCLASSIFIED

SENSITIVE BUT UNCLASSIFIED

SENSITIVE BUT UNCLASSIFIED

SENSITIVE BUT UNCLASSIFIED

Pursuant to their terms, several of Cuba's expropriation laws provided for

Further, Article 3 of Cuban Law 80 of 1996 provides: "The claims for

SENSITIVE BUT UNCLASSIFIED

The Castro regime's expropriations affected a wide variety of individuals

SENSITIVE BUT UNCLASSIFIED

Approved: L - Mary E. McLeod, Principal Deputy Legal Adviser ()

Drafted: Julian Simcock (L/CID), Ext. 6-8477

Cleared: WHA/CCA: MWells ()

SENSITIVE BUT UNCLASSIFIED

Claims Held by U.S. Nationals under the

Cuba Claims Presentation [RELEASE IN PART BS[

December 8, 2015 at [TIME]

In 1996, Congress amended the FSIA to create an exception to sovereign

To date, U.S. courts have entered at least 13 terrorism-related default

These outstanding terrorism-related judgments against Cuba have had-and

The Cuban Government considers the U.S. court judgments against it to be

L is exploring an opportunity by which to address the outstanding judgments

Approved: L - Mary E. McLeod, Principal Deputy Legal Adviser ()

Drafted: Julian Simcock (L/CID), Ext. 6-8477

Cleared: WIWCCA: MWells ()

SENSITIVE BUT UNCLASSIFIED

U.S. Government Claims

Cuba Claims Presentation

In the first Cuba claims program, the Foreign Claims Settlement

the Cuban Nickel Company. The second concerns the confiscation of

Approved: L - Mary E. McLeod, Principal Deputy Legal Adviser ()